I am unable to pay my debts. What can I do?

The worst thing you can do is hide. “The longer you wait, the more difficult the problem will be to resolve,” says Gail Cunningham, spokesperson for the National Foundation for Credit Counseling. For example, if you can’t even make minimum payments on your credit cards, since you’ll incur late fees, the interest rate on the debt will spike and your credit score will take a drubbing. Use these tips to determine your plan of action.

If your financial bind is temporary

Ultra-high heating bills during a cold winter are sucking up all your extra cash? If you’re sure your situation will improve within a few months, call your creditors and explain the situation. “Chances are they’ll be willing to work with you,” says Cunningham. Before you call, come up with a clear plan for how you’ll pay your debts so you can provide specifics to the folks you owe — and don’t make promises you can’t keep.

If the problem is longer-term

Consider getting help. There are reputable debt counseling agencies that can help you manage your finances and assist you in repaying your debts. A good counselor will analyze your situation based on the information you provide about your income, expenses and debt; make recommendations to help you dig out of debt; and create an ongoing plan to improve your financial situation. To make sure an agency is legit, verify that it’s a non-profit and a member of the National Foundation of Credit Counselors or the Association of Independent Consumer Credit Counseling Agencies. You can also check with the Better Business Bureau to make sure there are no complaints lodged against the firm.

If you are in severe financial distress, your counselor may suggest a debt repayment plan (DMP) or perhaps even filing for bankruptcy. In a DMP, the credit counselor will negotiate with your creditors to reduce rates and other fees, and you’ll make a single monthly payment to the agency for the term of the plan, usually three to five years. You won’t be able to use your credit cards or apply for new ones while you’re on the plan. A DMP isn’t free, but the cost should be under $50 a month.

Again, keep in mind that a counselor should only suggest a repayment plan in conjunction with a long-term plan to better manage your financial life. “If a counselor starts discussing a payment plan right away or the fees are high, run for the hills,” says David Jones, president of the Association of Independent Consumer Credit Counseling Agencies. To find a quality counseling agency in your area, go to the National Foundation of Credit Counselors or the Association of Independent Consumer Credit Counseling Agencies. In addition, the U.S. department of Justice maintains a list of approved credit counseling agencies on its website.